Institutional context and life satisfaction: does the rule of law moderate well-being inequalities?

Abstract

An emerging strand of research emphasizes the role of the macro institutional context in shaping the social distribution of well-being. This article examines the variations in the association between political power and subjective well-being by how the rule of law is instituted across societies. Two hypotheses of the rule of law role are tested: (a) power-tempering and (b) power-enhancement hypotheses. We use a unique dataset of 30,491 individuals from 27 countries with diverse social and political characteristics. We first confirmed the relationship between individuals’ perceptions of their positions in the power hierarchy and their overall satisfaction with their lives using models with country-level fixed effects. Moreover, this relationship significantly varies across countries, and the Rule of Law Index explains part of the variation, as indicated by random-effects models. In societies with well-defined, universally applicable, and fair laws, the association of one’s position of power and subjective well-being is reduced. Our study illustrates that institutions of better quality and functioning may equalize access to well-being.